MihsabaHow to use
Calculate unit contribution, its percentage and contribution for your selected quantity from selling price and variable cost.
- Enter matching-period inputs with consistent units: Unit selling price, Variable cost per unit, Unit quantity in the scenario
- Unit contribution = selling price − variable cost; ratio = contribution ÷ price × 100
- Calculate, then check data definitions and assumptions in the note before comparing with another period.
How it is calculated
Example
A price of 50 and variable cost of 30 give unit contribution of 20 and a 40% ratio. Selling 200 units gives contribution of 4,000 before fixed costs and revenue of 10,000.
Important notes
Contribution is available to cover fixed costs and then profit; it is not net profit or automatically gross margin. Include costs that rise with each unit, such as materials, payment fees and variable shipping for your operation, using a consistent tax and discount basis. Price and unit variable cost are assumed constant for the selected quantity. Negative contribution is allowed when cost exceeds price. Volume discount tiers and fixed costs are not applied.
Worked examples and interpreting results
A price of 50 and variable cost of 30 give unit contribution of 20 and a 40% ratio. Selling 200 units gives contribution of 4,000 before fixed costs and revenue of 10,000.
| Case | Calculation | Result |
|---|---|---|
| Unit contribution | 50 − 30 | 20 money |
| Contribution ratio | 20 ÷ 50 × 100 | 40 % |
How to check the result
Contribution is available to cover fixed costs and then profit; it is not net profit or automatically gross margin. Include costs that rise with each unit, such as materials, payment fees and variable shipping for your operation, using a consistent tax and discount basis. Price and unit variable cost are assumed constant for the selected quantity. Negative contribution is allowed when cost exceeds price. Volume discount tiers and fixed costs are not applied.
Frequently asked questions
Does contribution of 4,000 mean profit of 4,000?
Fixed costs and other excluded expenses still need to be deducted to obtain profit under your chosen definition.
What does a negative ratio mean?
The entered unit price does not cover variable cost. Each unit adds negative contribution before fixed costs.
Are the starting inputs my actual data?
They are only the worked example. Replace them with your data and press Calculate. Editing an input clears the old result.